Every market has its own personality, its own characteristics.
After working the gold mining indices GDX, more specifically GDXJ, a repeating trendline tendency was observed in leveraged inverse, JDST.
That repeating market behavior, shown below.
Junior Miners, Leveraged Inverse, JDST
The un-marked daily chart, first
The next several charts zoom-in on specific areas.
Set The Stop
And walk away …
As the tagline in this post shows with JDST-22-04, we’re already short the Junior Miners via JDST (not advice, not a recommendation).
The current stop, is set at yesterday’s low of 6.61.
Depending on price action today, that stop will be moved up to the recent low (presently @ JDST 6.855).
GDXJ, reversed at Fibonacci 55-Days, 13-Weeks from the January 28th, low.
As presented in this update, we’re also Fibonacci 89-Weeks (+1), peak-to-peak.
Time correlation coupled with price action, along with incessant financial press ‘gold standard‘ narrative, gives a near perfect backdrop for a significant downside reversal.
The trade may or may not work out … price action is the final arbiter. However, we’ve already shown the trend characteristic of the market.
A simple but effective way to manage the trade is to follow that trend, raise the stop accordingly and exit when stopped out (not advice, not a recommendation).
Charts by StockCharts
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point®, trade mark: No. 6,505,279